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Last Updated: Saturday, 21 June, 2003, 01:20 GMT 02:20 UK
Hain retreats over tax rise
Peter Hain
Peter Hain was praised by Robin Cook
Commons leader Peter Hain was forced to drop a suggestion higher earners should pay more tax in a speech after criticism from the government.

He changed his speech to a left-wing think-tank in Cardiff on Friday after rebukes from Downing Street and the Treasury.

Tony Blair, attending the EU summit in Greece, insisted tax policy would not change.

But Mr Hain won the backing of a former leader of the House Robin Cook, who told BBC Radio 4's Any Questions on Friday the minister was an immense asset to the Cabinet.

Instead of planned comments, Mr Hain spoke of the need to consider radical steps to narrow the gap between rich and poor and ensure fairness in the tax system.

It was a climbdown for someone who has enjoyed a reputation as one of the free-thinkers of the Labour government, according to BBC political correspondent Carole Walker.

'Immense asset'

But Mr Cook said Mr Hain was an "immense asset" to the Cabinet because he said things that might be difficult.

People were doing "immense damage to politics by insisting on too tight party discipline," Mr Cook told Radio 4.

He said one of the big reasons people were turning off politics was because they do not see enough politicians "thinking for themselves, saying original things and speaking from the heart and from conviction."

While he did not agree with Mr Hain on the tax issue, people should be allowed to "murmur in public" what they were thinking.

'No going back'

Speaking to the audience in Cardiff, Mr Hain said: "Let me make clear... we will not raise the top rate of tax and there is no going back to the old days of punitive tax rates to fund reckless spending".

Earlier however, he had spoken of there being "hard choices" on tax ahead and mooted the possibility of high earners may have to pay more.

Mr Blai moved quickly to categorically deny there was any question of changing the government's tax policy.


The Treasury also reacted angrily, saying it was up to Chancellor Gordon Brown to make taxation decisions.

In an interview on the BBC's Today programme, Mr Hain said too many people on average incomes - including teachers and police officers - now fall into the 40% income tax band.

He said in order to help those on low and middle incomes the top earners could be asked to give more.

Delivering the Aneurin Bevan lecture, he said a lot of what had been reported earlier was "news to me".

It smacked of an "obsession with splits and process," he said, rather than concentrating on substance.

They want to tax more, they want to spend more and I am afraid they will fail more
Michael Howard

He said the government was not planning to go back to "the old days" of high taxes.

"We will not be raising the top rate of tax," he said.

Instead he said, he had simply wanted to ask "hard questions on the issue".

Opposition parties also directed fierce criticism at Mr Hain.

Shadow chancellor Michael Howard said it represented "the slipping of the last of the veils from New Labour".

He said Labour had failed to learn the lessons from the 1970s and warned high earners would leave the UK if taxes were raised.




WATCH AND LISTEN
The BBC's Carole Walker
"Downing Street and theTreasury made it plain this was not even up for discussion"



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